Looking back and looking ahead
No year has challenged local businesses like 2020. A global pandemic closed our stores and threatened to break the local economies we love. Despite that stress, Honeycomb saw first hand how businesses reimagined themselves and how community members rose up to help.
Payment relief
Seeing the crisis on the horizon, our team moved quickly. We asked Honeycomb investors whether we could extend payment relief on their behalf. 97% of respondents voted in favor of offering payment relief to businesses impacted by the pandemic. In 2020, only four Honeycomb businesses have failed to meet the obligations of their note agreement. Those businesses had their community investors vote on the best course of action, including an option for loan forgiveness. We'd like to thank our community investors for their flexibility, responsiveness, and empathy throughout this global challenge. Your support of local businesses on the Honeycomb platform, in carry-out windows, and beyond has made a difference.
Communities kept credit flowing
As PPP loans disproportionately went to large businesses and public programs couldn't meet businesses' full needs, community investment became critical for many entrepreneurs. Through the pandemic, we, with our growing network of community investors, deployed record levels of community capital to small businesses with our Relief Loan program and our Loyalty Bonds program. The $3M dollars deployed over Honeycomb's lifetime - which rapidly accelerated during the shutdowns - to small businesses is early proof that investment crowdfunding can be a driving force for building resilient local economies.
As banks tightened their lending criteria and many fintech lenders stopped lending altogether, community capital helped keep investment flowing into Main Street. If prior recessions are any indication, it will be years before traditional lenders are ready to lend at pre-COVID levels. With community capital, we can keep investing in the ideas and people that make our community shine.
Tackling inequalities in access to capital head on
2020 also brought racial disparities to the forefront. In our work, we see how chronic disinvestment and legacies of discrimination have prevented minority entrepreneurs from accessing the capital they need to scale. Over 2020, our platform tripled the number of campaigns launched by minority-owned businesses compared to 2019. But that's just the start. With internal goals around recruiting diverse businesses and improving the funding experiences of businesses in low-to-moderate income communities, we are leaning into our mission to make rebuilding Main Street more inclusive than ever.
Lastly, we want to thank the small businesses who chose to make us and their community a part of their growth story. If 2020 is any evidence, there are people out there, strangers and friends alike, that believe in the work you do to serve your community. In 2021, we hope to channel your grit, passion, and love for community in all the work we do.
Onward,
The Honeycomb Team
Become a part of the #InvestLocal movement. Find out how you can grow your business with a crowdfunded loan on Honeycomb here, or learn how to invest in local businesses here.